MEO Settles Gascorp Transaction

MEO Australia has received regulatory approval for the transfer of Gascorp Australia Pty Ltd. ’s 15% equity in exploration permit WA-361-P to MEO’s subsidiary company North West Shelf Exploration Pty Ltd. Following receipt of this approval, MEO has paid Gascorp US$1 million cash to settle the transaction and now has an unconditional 50% participating interest in the permit. WA-361-P lies immediately adjacent to the MEO operated WA-360-P in which the Artemis-1 well is expected to commence drilling next week.

The permit is in the final year of its secondary term and an application for renewal of the permit has been submitted to the Designated Authority. In accordance with permit tenure rules, the renewal application involved the relinquishment of seven of the fifteen graticular blocks currently comprising the permit. MEO has identified several leads that are independent of the Artemis prospect and which require additional technical work to mature to drillable prospect status.

With this transaction, MEO has restored a sizeable equity position in the permit. This provides significant flexibility and optionality in defining and crystallising future potential shareholder value.

MEO Australia on Nov. 15 reported it has executed a binding sales and purchase agreement with Silver Wave Energy Pte Ltd to acquire their 100% interest in exploration permits AC/P50 and AC/P51 in the Ashmore Cartier region of the Timor Sea. Consideration for this acquisition is US$270,000 payable upon receipt of regulatory approvals for the equity transfer. As part of the agreement, Silver Wave has an option to acquire a 10% working interest in each permit prior to the expiry of Permit Year 3 by repaying 20% of MEO’s costs, including acquisition costs.

These permits cover a combined area of 1,943.6 km2 and were awarded in April 2009. They are currently in Permit Year 2 of their work program. Seismic acquisition is programmed for Permit Year 3 commencing 21st April 2011.

In a separate agreement, MEO has granted RedRock Energy Pte an option to acquire a 5% carried interest in each permit in consideration for the technical work RedRock has undertaken on the permits to date. Under this agreement, MEO will carry RedRock’s 5% participating interest in each permit until the permit is either relinquished or if MEO elects to drill a well in either of the permits, will carry RedRock’s 5% participating interest through the first well in that permit.

MEO will continue to evaluate opportunities to add attractive acreage to its portfolio to ensure the replenishment of a seriatim of opportunities to add shareholder value.